Operators in the real estate sector have consistently pushed for the idle pension fund which, as at last December 31, was N14.99 trillion. PenCom has approved 25 per cent withdrawal from Retirement Savings Account (RSA) balance as equity contribution for mortgages. This has opened a window for real estate operators to create portfolios for subscribers to own homes. Recently, UPDC joined the ray, specifically targeting the middle class against its earlier style of building luxury homes, reports OKWY IROEGBU- CHIKEZIE
With rapid growth of the country’s population and economic downturn, UPDC has reiterated calls for the unlocking of over N14 trillion pension fund to improve homes’ accessibility and ownership among Nigerians.
At a briefing, its Chief Executive Officer, Mr. Odunayo Ojo, said there was a need for a regulation to strengthen advocacy for Nigerians to use their pension contributions as equity for housing, hailing the new policy that allows pension contributors to access 25 per cent of their contributions for home ownership.
He said: “The pension asset is over N14 trillion and by regulation can only be invested through an instrument such as treasury bills, government bonds. But now there is a policy that it can be invested in real estate development trust as one of the viable investments.”
Explaining further, Ojo said what a pension account holder needed to do was to meet a developer and signify interest.
He said his firm was pushing for a policy to reform the sector such as foreclosure laws as, according to him, over 20 million houses are needed to house Nigerians.
He further explained that against this backdrop, there was no reason Nigerians should not use funds from PenCom to acquire homes.
According to Ojo, housing creates stability in developed economies; hence, there is no reason Nigeria should not experience same now that funds are available from PenCom for home ownership.
Ojo said his company was working on a pipeline of projects which requires a lot of capital and patience and so the new Pension Laws relating to housing has put UPDC in a comfortable position to deliver homes to clients.
On the need for foreclosure laws, he said it would protect a landlord from dubious tenants. He recalled that some people who bought their houses in 2014 were still in court with them as they refused to complete their payments.
He said UPDC was refocusing on the provision of middle-income housing across the country, as findings showed that there was a high demand in the segment.
Ojo noted that when UPDC incurred losses for six consecutive years, they had to draw back and appraise their strategy. They found that if they must continue to be in business the middle income class is the future of real estate.
He said UPDC had over N22 billion in assets portfolio, a 471-room hotel, 30 estates under management, over 1,000 residential units built and a large retail mall.
According to him, the firm was leveraging its 25 years’ reputation for delivering standard projects, coordinating efficient development/asset management value chains, offering facility management services to restructure its hotel project.
UPDC Head, Sales and Marketing, Damola Oguntoyinbo, said their latest estate dubbed Hampshire was a five-hectare site and services development on Monastry Road, Sangotedo, Lekki, Lagos. He said the development had residential plots broken into varying plot sizes with commercial plots.
He said: “The development is proposed to be a luxurious, serviced, mixed-use development and would boast of quality infrastructure such as a well-laid out roads, an effective drainage, solar powered streetlights, a pedestrian walkway, ample greenery and a recreational area. It is about a minute’s drive from the famous Novare Mall, on the Lekki-Epe Expressway.”
He also aluded the new PenCom’s policy that allows a contributor to access 25 per cent of his contribution through mortgage to own his house. In his words, a decent housing is a precursor to stability in homes and the society at large.
“Recently, UPDC’s interest in Real Estate Investment Trust (REIT) was unbundled to its shareholders. UPDC holds five per cent residual in the RElT as sponsor. The company is strengthening its capital structure by raising of N16 billion via rights issue, operating now as a subsidiary of Custodian Investment Plc and as an associate company to UAC,’’ he added.
